Business-to-business startups warm up to SMEs

PUNE: Even as various ecommerce companies and organised retail run mega sales promotions in a bid to outdo each other, it’s the neighbourhood kirana store that’s been caught in the crossfire. This is what prompted Sahil Sani, a traditional distributor, to look into whether technology could be used to make these shop owners competitive again.

“Having been a distributor, I knew their requirements and just made the process more efficient using technology,” said Sani, founder and chairman of Just Buy Live. His platform enables small shop owners to buy directly from the brands, doing away with the multilayer distribution system.

Just Buy Live recently tied up with Religare to provide a credit-based model to retailers. Since its launch at the start of the year, Sani claims to have got 50,000 registered retailers and 1,100 brands on board and his aim is to reach out to 1million retailers and 5,000 brands by the end of 2016. Just Buy Live has a team of 1,500 people that works with small shopkeepers and get them on-board the appbased platform.

Small and medium enterprises (SMEs) in India have typically been ignored by most startups operating in the B2B space. Not surprising given that larger enterprises would have the capacity and budgets to spend on technology.

That is slowly changing. Many of the B2B startups that have come up in the past year are geared towards working only with SME customers. “SMEs have been perceived as nonpaying customers, but that’s because they’ve never been offered a solution that worked for them,” said Ashwani Rathore, cofounder of Gladiris Technologies (SpiderG), which provides ERP integrated e-invoicing services.

“They’ve been underserved by IT firms, but increasing smartphone penetration and reduced cost of enterprise software is changing that.” During the beta stage, SpiderG signed on more than 150 small pharma companies, preferring to focus on industry density rather than spreading themselves too thin.

According to a Zinnov study, SMEs in India will be a $25.8 billion market for emerging technologies by 2020. Of the 50 million SMEs in the country, over 10 million are tech-ready. Creating an ecosystem to reach out to SMEs in India is a challenge. But it is also an opportunity.

“You have to have someone to sell it (technology), implement it and create resources to manage the software at their end. We’ve created our own ecosystem through channel partners and we train them on all these aspects,” said Asheer Kapoor, founder and managing director of EPPS Infotech, which offers mobile-based enterprise management solutions tailored to SMEs.

Kapoor’s rationale for targeting SMEs is clear. The bigger businesses already have their needs taken care of while this segment is largely untouched. EPPS offers the option of a cloud or on-premise server-based model, which come with different cost structures.

The amount of hand-holding required by some customers in the early days may be one reason why startups prefer to sell to the large businesses. One solution is a do-it-yourself (DIY) model, which requires minimal inputs from the tech provider. That is also a reason in the surge of DIY app firms that enable small restaurants or businesses create their own apps.

High smartphone penetration has made people comfortable using appbased services, and that is something most companies are trying to tap into.

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